Inside Perspectives magazine,
you’ll find articles from preeminent thought leaders to keep you well-versed in the developments, news, and insights of today’s credit unions. In our fall edition, we feature Cornerstone League ALM and Financial Analysis Director Margot Strong.
In her article, “Are you adjusting deposit and loan rates when the market suggests you should?” Strong addresses market-based pricing of loan and deposits.
“If a credit union changes rates on the deposit side, we need to review and adjust our loan rates regularly,” said Strong. “Credit unions operate on a spread basis, and if we continually increase our deposit rates without addressing our loan rates, that spread—the difference between where we buy and sell money—gets compressed.”
Strong goes on to discuss how to determine your expense factor: “How do you know if a set servicing spread will cover what it costs your credit union to make the loan? A cost is associated with offering the different types of loans at your credit union, and it's not just the extension of credit.”
Read more of Strong’s expert insights in Perspectives, beginning on page 22.
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